U.K. Consumer Confidence Drops to Lowest in 15 Years, GfK Says

U.K. consumer confidence fell to a 15-year low in March as Britons grew more concerned that an economic slowdown is deepening, GfK NOP Ltd. said.
A gauge of sentiment declined 2 points from February to minus 19, the lowest since February 1993, the London-based market researcher said today, citing its poll of 2,007 people for the European Commission. All five components of the index declined.
``Consumer confidence again continues its downward trend for the seventh month in a row,'' Rachael Joy, who works on the survey for GfK, said in a statement. ``With news reports of possible recession in America, fears of recession in the U.K. and stock market fluctuations, the consumer's gloom continues to grow.''
Bank of England Governor Mervyn King told lawmakers on March 26 that the U.K. economy faces ``a sharp slowing of growth'' as a global credit freeze drives up borrowing costs for companies and consumers. At the same time, rising food and energy prices are eroding living standards and fueling inflation, limiting the scope for further interest-rate cuts.
An index measuring consumers' outlook on the general economic situation for the next year fell three points to minus 32, the lowest since October 1992, while a measure of their personal financial situation over the next 12 months dropped to the lowest in eight years, the survey found. A gauge of spending on major purchases fell two points to minus 21, the lowest since April 1995. The poll was conducted March 7-16.
U.K. economic growth will almost halve to 1.6 percent in 2008, the weakest since 1992, the year after Britain had its last recession, the average forecast of 22 economists surveyed by the Treasury this month showed. House prices fell for a fourth month in February, Nationwide Building Society said last month.
The Bank of England will probably cut the benchmark rate by a quarter-point at its next meeting on April 10, according to the median forecast of 25 economists in a Bloomberg News survey. The central bank has cut the rate twice since December to 5.25 percent.